Talks between the UK and India on a new free trade agreement (FTA) have been paused until after the upcoming Indian general elections, which run from mid-April to June. That’s according to recent report from the FT.
India’s election commission has said the vote will take place in seven stages over April and May for the country’s 968 million eligible voters.
Deal block
Calls from Mumbai for Westminster to exempt Indian workers from national insurance payments when working in the UK have held up the talks in recent months, as the UK seeks reduced tariffs for its products in the Indian market, particularly for cars and whisky.
The latest, 14th round of discussions ended without producing an agreement last Friday (15 March), and it appears likely that the next will not take place until at least May or June.
UK prime minister Rishi Sunak spoke to Indian counterpart Narendra Modi last week in his own effort to seal a deal.
Sunak’s spokesperson said of the discussion only that “the prime minister reiterated the importance of reaching an ambitious outcome on goods and services”.
The Department for Business and Trade (DBT) added:
“Whilst we don’t comment on the details of live negotiations, we are clear that we will only sign a deal that is fair, balanced and ultimately in the best interests of the British people and the economy.”
Labour moves
According to the Guardian, UK officials hope to achieve an agreement before the next UK general election, assuming it is not called earlier than autumn.
The Labour Party has sent representatives to the country in anticipation of a win in that election, with shadow business and trade secretary Jonathan Reynolds promising a “mutually beneficial” agreement with India should he be involved in negotiations.
He has been accused by Conservative officials of making the negotiations more complex by visiting the country.
EFTA agreement
The news of the pause on UK negotiations comes soon after India agreed a deal with the European Free Trade Association (EFTA) to lift tariffs across a variety of industries for imports from the EFTA countries of Norway, Iceland, Switzerland and Liechtenstein.
Modi called that agreement a “watershed moment” achieved “despite structural diversities in many aspects” between his country and the association.
That agreement is also expected to garner over US$100bn in investment into India from EFTA countries, which EFTA spokesperson Asdis Olafsdottir said she hoped would create over a million new jobs in the country.